The offer is now available until 11pm next Monday, February 25, and improves on the Derbyshire's current market-leading offer of 5.1 per cent (APR representative) on loans between £7,500 and £14,999 on loans between one and five years.

This would see a person taking out a £10,000 loan over five years having to repay £11,322.74 at a rate of £188.71 a month.

Market leading offer: The Derbyshire Building Society is offering personal loans for 5 per cent APR until Monday.

Derbyshire BS, which is part of the Nationwide Group, has been one of the main movers in the loan price wars that have been ongoing for over a year now.

Five per cent is now the lowest rate seen in at least the last 10 years and with the Government's Funding for Lending scheme allowing banks to obtain cash at interest rates of just 0.25 per cent, it is conceivable that rates will fall below 5 per cent in the near future.

Paul Wootton, Nationwide's head of personal loans, said: 'There are times in people's lives when they need a personal loan in order to spread the cost of a purchase.

'There has never been a better time to consider a Derbyshire personal loan, with the society now offering a market-leading rate of 5 per cent APR representative.'

Under EU rules the society is only obliged to offer the 5 per cent advertised rate to 51 per cent of successful applicants, so getting the best rate is by no means guaranteed.

It means that in the space of a year, the best loan rates available between £7,500 and £15,000 have dropped by 1 per cent, with M&S Money the market-leader in February 2012 with a 6 per cent offer.

But if you get accepted for a Sainsbury's personal loan, and then apply for a Derbyshire BS loan within 28 days and get offered the 5 per cent rate, then Sainsbury's would reduce its rate to 4.9 per cent.

There is a pitfall of doing this however, as making multiple applications for loans or credit in a short space of time can adversely impact on your credit rating, particularly if you are rejected for one of them.

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